Nexteer Automotive Group Limited · HKEX:1316
Nexteer Automotive — H1 2021 Earnings Presentation
34 slides from Nexteer Automotive's earnings presentation, Aug 17, 2021
Slide 1: 2021 Interim Results Announcement
2021 Interim Results Announcement 17 August 2021 Copyright 2021, Nexteer Automotive Corporation. All rights reserved. 1
Slide 2: Safe Harbor Statement
Safe Harbor Statement These materials have been prepared by Nexteer Automotive Group Limited (“Nexteer” or the “Company”) and are being furnished to you solely for informational purposes. The information contained in these materials has not been independently verified. NO REPRESENTATION OR WARRANTY
Slide 3: 1H 2021 Business Highlights
1H 2021 Business Highlights ROBIN M I L AV E C Executive Board Director President Chief Technology Officer Chief Strategy Officer 33
Slide 4: Executive Leadership Changes
Executive Leadership Changes ROBIN HERVÉ MICHAEL MILAVEC BOYER BIERLEIN President, Senior Vice President, Senior Vice President Chief Technology Officer (CTO), Global Chief Operating Officer & Chief Financial Officer Chief Strategy Officer (CSO) & North America Division President & Executive Board D
Slide 5: Strategy for Profitable Growth
Strategy for Profitable Growth Expand Strengthen Capitalize on Optimize Cost Pursue Select Target China & Diversify Technology EPS as Enabler Structure Acquisitions & Emerging Revenue Base Leadership for ADAS & Alliances Markets A well-defined plan to drive stakeholder value 5
Slide 6: Business Highlights
Business Successful launch of 16 programs across multiple product lines, regions and customers Highlights New Business Bookings with strong focus on EV programs Strategic product and technology enhancing market leadership Industry recognition of operational efficiency and execution 66
Slide 7: Business Highlights
Business Successful launch of 16 programs across multiple product lines, regions and customers Highlights New Business Bookings with strong focus on EV programs Strategic product and technology enhancing market leadership Industry recognition of operational efficiency and execution 77
Slide 8: Launched 16 Major Programs in 1H 2021
Launched 16 Major Programs in 1H 2021 NORTH AMERICA EM EASA APAC (5) (2) (9) Ford Bronco Jeep Grand Cherokee Renault Kangoo Chevrolet Bolt EUV Tata Limber EV GAC Aion Y REPS; Column REPS Halfshafts CEPS; Halfshafts Halfshafts CEPS Chevrolet Bolt EUV Infiniti QX60 Mercedes-Benz C-Class Nissan Pathfin
Slide 9: Ford Bronco Features New Innovation
Ford Bronco Features New Innovation REPS ▪ Powerpack Innovation: – <10 FIT, Folded Circuit Board – Improved Packaging, Cost & Safety Powerpack ▪ Rack EPS-enabled ADAS – Lane Keeping & Auto Park Assist ▪ Enables OTA Flash Updates ▪ Off-Road Profile: Software & Tuning, Development & Validation 2021 Fo
Slide 10: Business Highlights
Business Successful launch of 16 programs across multiple product lines, regions and customers Highlights New Business Bookings with strong focus on EV programs Strategic product and technology enhancing market leadership Industry recognition of operational efficiency and execution 10 10
Slide 11: Business Wins - 1H 2021
Business Wins - 1H 2021 Bookings* & 1H Bookings Key Highlights Ful l - Ye a r O ut l ook Composition ($ in millions) ($ in millions) Nomination Timing ▪ 1st REPS Business Weighted to 2H 13% 36% Win with Japanese ~$6,400 16% $1,343M $1,343M 64% OEM 71% EPS CIS N. America $26.4 Driveline Asia Pac. ▪ S
Slide 12: Backlog as of June 30, 2021
Backlog as of June 30, 2021 ORDER-TO-DELIVERY BACKLOG* ($ in billions) Roll-Forward Composition $1.7 $1.3 $0.3 20% 23% $24.6 $24.5 11% $24.5B $24.5B 58% 3% 66% 19% Backlog as 1H 2021 Bookings Industry Backlog as of 12/31/20 Revenue Vol. Fcst of 6/30/21 EPS CIS N. America * Booked business informatio
Slide 13: Business Highlights
Business Successful launch of 16 programs across multiple product lines, regions and customers Highlights New Business Bookings with strong focus on EV programs Strategic product and technology enhancing market leadership Industry recognition of operational efficiency and execution 13 13
Slide 14: Industry Leading Steering & Driveline Technologies Supporting Business Growth
Industry Leading Steering & Driveline Technologies Supporting Business Growth High Output REPS Dual Pinion EPS Modular CEPS Expands Breadth of EPS Improves Packaging & Innovates Cost-Efficiency to LCV & HD Trucks Selectable Redundancy & Scalability Nomination of Ball Spline Axle Steer-by-Wire Stowab
Slide 15: Electrification: Value, CPV & Market Share Expansion
Electrification: Value, CPV & Market Share Expansion EV Market Growth HD Full-size Truck & LCVs Transition to EPS GM Electric Hummer Chevy Electric Silverado High Output REPS Product Expansion Superior Market Position & Tech Leadership Expands Value, CPV Ford Electric F150 GMC Electric Sierra & Mark
Slide 16: High Output EPS Solutions for All Segments of Electric Vehicles
High Output EPS Solutions for All Segments of Electric Vehicles Offering high output options for all under hood steering systems Meeting higher EV loads (B-D vehicle segments) to enhance position in growing Electrification trend Solidifying global REPS, European SPEPS market leadership 16
Slide 17: Acceleration in Safety, Connectivity and Mobility Mega Trends
Acceleration in Safety, Connectivity and Mobility Mega Trends Connectivity Advanced Safety, Mobility (ADAS L3+) & Software Performance (ADAS L3+) Nomination of Cyber Security 17
Slide 18: Business Highlights
Business Successful launch of 16 programs across multiple product lines, regions and customers Highlights New Business Bookings with strong focus on EV programs Strategic product and technology enhancing market leadership Industry recognition of operational efficiency and execution 18 18
Slide 19: Industry Recognition
GM Supplier of the Year Award Industry GM Supplier Quality Excellence Award Recognition SAIC GM Aftermarket’s Excellent Supplier Award Chang’An Excellent Supplier Award 2021 Automotive News PACEpilot Finalist for Steer-by-Wire with Stowable Steering Column & CNX Motion’s Brake-to-Steer ITEA’s Bronze
Slide 20: Integrating ESG into our Global Business Strategies
Integrating ESG into our Global Business Strategies Environmental Social Governance ▪ Newsweek’s list of America’s Most Responsible Companies 3-Tiered Sustainability Governance Structure: ▪ Most Responsible Company in Suzhou Industrial Park Award for 1. Board of Directors Nexteer China Oversight ▪ E
Slide 21: 1H 2021 Financial Review
1H 2021 Financial Review BILL QUIGLEY Senior Vice President Chief Financial Officer 21
Slide 22: 1H 2021 Financial Summary
1H 2021 Financial Summary ($ in millions) Significant Demand Recovery vs. Industry Challenges Weighed on 1H 2020 Performance vs. 2H 2020 Global OEM production up +29% Y/Y; Supply constraints accelerated through sharp rebound from Q2 2020 low point Q2 2021, increasing volatility / Revenue growth outp
Slide 23: 1H 2021 OEM Production Environment
1H 2021 OEM Production Environment (units in millions) Global OEM Production Units* Served Markets (excludes Middle East and Africa) * according to IHS Markit Ltd. July 2021 forecast N. America Q1 Q2 1H 2H '20 Q1 Q2 1H 2H '20 2021 3.6 3.2 6.8 7.9 2021 20.6 18.8 39.4 44.1 vs 2020 (0.2) 1.8 1.6 (1.1)
Slide 24: 1H 2021 Key Financial Metrics
1H 2021 Key Financial Metrics ($ in millions) Revenue EBITDA Net Profit* Free Cash Flow +43.3% +84.1% 62.9x $1,734 $213 $83 $1,211 -$44 16.0% 15.8% $116 9.6% 12.3% 6.5% 4.8% $1 -$190 1H 2020 1H 2021 1H 2020 1H 2021 1H 2020 1H 2021 1H 2020 1H 2021 * Net Profit Attributable to Equity Holders 24
Slide 25: Regional Revenue Performance
Regional Revenue Performance ($ in millions) Total Revenue N. America APAC EMEASA +43.3% +30.0% +67.6% +69.8% $1,821 $1,734 $1,111 $1,032 $411 $386 $315 $300 $794 $1,211 $231 16.0% 15.8% $186 -4.8% -7.1% -5.9% +5.2% 1H 2020 2H 2020 1H 2021 1H 2020 2H 2020 1H 2021 1H 2020 2H 2020 1H 2021 1H 2020 2H 2
Slide 26: Revenue Bridge – 1H 2021 vs 1H 2020
Revenue Bridge – 1H 2021 vs 1H 2020 ($ in millions) Total Revenue Y-O-Y Revenue Drivers +43.3% $1,734 $463 $16 $1,734 $1,211 $45 $1,211 $524 1H 2020 1H 2021 1H 2020 FX V/M/P Recoveries / Other 1H 2021 Strong OEM Production Recovery All Served Markets 26
Slide 27: Revenue Bridge – 1H 2021 VS 2H 2020
Revenue Bridge – 1H 2021 VS 2H 2020 ($ in millions) Total Revenue Sequential Revenue Drivers -4.8% $25 -$123 $1,821 $1,821 $11 $1,734 $1,734 -$87 2H 2020 1H 2021 2H 2020 FX V/M/P Recoveries / Other 1H 2021 Supply Constraints Driving Sequential Pull-Back in OEM Production 27
Slide 28: Revenue Growth vs. Market
Revenue Growth vs. Market ($ in millions) Adjusted Revenue** ** Adjusted revenue excluding foreign exchange and commodity recovery Vs. 1H 2020 (Y-O-Y) Vs. 2H 2020 (Sequential) Outpaced Market 730 bps Outpaced Market 520 bps Light Vehicle Unit Production Change* According to IHS Markit Ltd. July 2021
Slide 29: EBITDA Bridge – 1H 2021 vs 1H 2020
EBITDA Bridge – 1H 2021 vs 1H 2020 ($ in millions) EBITDA Y-o-Y EBITDA Drivers (% of revenue) +84.1% $129 -$21 -$10 -$14 $213 $213 $13 $116 $116 9.6% 12.3% $97 1H 2020 1H 2021 1H 2020 FX V/M/P Logistics Raw Matl - Other - Net 1H 2021 Net Positive Demand Environment Tempered by Supply Chain Constrain
Slide 30: EBITDA Bridge – 1H 2021 vs 2H 2020
EBITDA Bridge – 1H 2021 vs 2H 2020 ($ in millions) EBITDA Sequential EBITDA Drivers (% of revenue) -18.7% $14 -$58 $262 $262 $213 -$17 $20 $213 -$8 14.4% 12.3% -$49 2H 2020 1H 2021 2H 2020 FX V/M/P Logistics Raw Mat - Other - Net 1H 2021 Net Lower Volume / Volatile Supply and Cost Environment 30
Slide 31: EBITDA by Region
EBITDA by Region ($ in millions) NA APAC EMEASA (% of revenue) (% of revenue) (% of revenue) 14.5% 20.1% 20.6% 8.8% 19.2% 10.7% 6.4% 9.2% -$1 $26 $20 $73 $162 $110 $46 $79 $79 -0.4% 1H 2020 2H 2020 1H 2021 1H 2020 2H 2020 1H 2021 1H 2020 2H 2020 1H 2021 31
Slide 32: EBITDA to Net Profit Bridge
EBITDA to Net Profit Bridge ($ in millions) 1H 2020 2H 2020 1H 2021 EBITDA $ 116 $ 262 $ 213 ▪ 1H 2020 D&A expense included program impairment of $32M - D&A Expense 145 115 119 ▪ 1H 2021 D&A included $5M Operating Profit $ (29) $ 148 $ 94 recovery of previously impaired + Share of JV Earnings - 1 -
Slide 33: 1H 2021 Free Cash Flow / Balance Sheet
1H 2021 Free Cash Flow / Balance Sheet ($ in millions) Dec 2020 Jun 2021 1H 2020 1H 2021 Cash and Capital Gross Debt $ 249 $ 114 Finance Leases 57 67 Less: Cash 553 328 $95 $(139) Net Debt / (Cash) $ (247) $ (147) $491 -$373 Total Equity $ 1,921 $ 1,977 $(44) Total Net Capital $ 1,674 $ 1,830 $(28)
Slide 34: Considerations for 2H and Beyond
Considerations for 2H and Beyond Navigate Near-term Challenges Strong Positive Factors Mid-Term Supply Chain Constraints Favorable Economic Growth ✓ Low visibility to timing of stability in ✓ Monetary / fiscal stimulus measures semiconductor supply Continued Global OEM Production ✓ Elevated commodit
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